Q1 Preview: Street Sees Inline-to-Strong Quarter But Conservative Guidance from F5 (FFIV)
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Price: $384.63 +1.81%
Rating Summary:
21 Buy, 25 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
21 Buy, 25 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Shares of F5 Networks (Nasdaq: FFIV) are trading up over 1 percent Wednesday as the company is expected to report its first-quarter earnings this afternoon following the closing bell. Management has a conference call scheduled for 4:30 pm ET. The dial-in for the call is 800-857-3834.
The Wall Street consensus is $1.01 per share in earnings on $319.15 million in sales. During the first quarter of last year, the company reported earnings of $0.88 per share on $268.93 million in total sales. The company’s guidance calls for earnings of $0.99 to $1.01 on $315 to $320 million in sales for the quarter.
For the full year 2012, analysts on the Street are currently estimating $4.40 per share in earnings on $1.38 billion in total sales.
According to data from Bloomberg, shares of F5 Networks have 25 Buy ratings, 10 Hold ratings and no Sell ratings. The average price target on shares of FFIV is $119 with a range from $85 to $150.
Analyst Comments:
Wells Fargo is forecasting the company may post its first quarter results with upside or toward the high end of the company’s guidance. Following market checks, the firm notes the upside will be driven by technology and financial verticals. For the quarter, the firm estimates gross and operating margins of 83 percent and 37.9 percent, resulting in earnings of $1.01 per share. Wells Fargo maintains an Outperform rating and $112 to $122 price valuation range on the stock.
Wells Fargo anticipates management will offer conservative guidance which will fall inline with the Street’s estimates. “We believe F5 remains on track to deliver 20% growth in 2012 due to strong end market demand, the ramp of new products and the seasoning of sales hires over the past few years. We believe FQ1 results and guidance should bolster confidence in this growth objective, which remains above current consensus.”
Goldman Sachs first-quarter estimates of $1.01 per share in earnings on $320 billion in sales are relatively inline with the Street’s. The firm is also anticipates management will offer conservative second quarter guidance. An analyst at Goldman said, “We believe that F5 has a solid security product set that will lead to some share gains, but we do not believe it will be enough to push results meaningfully above 20% growth as security competitors such as Cisco and Juniper work on upgrading their product sets and others, such as Check Point and private Palo Alto Networks, continue to innovate.”
Goldman Sachs maintains a Neutral rating and $96 price target.
Wedbush recently reiterated an Outperform rating and $115 price target amid the company's leading position in the application delivery market, current demands trends, and potential traction with product refresh and new solutions. Although the firm is bullish on its long-term outlook for the company, for the first quarter Wedbush forecasts earnings of $1.01 per share on $319.3 million in sales.
An analyst at Wedbush said, “We continue to like the name for the long term due to F5’s strength in the core application delivery market, a new product refresh in 2012, and our optimism on the company’s push into new markets, including new security firewalls for the telco vertical. We advise investors to build positions in F5 as it remains the clear leader in the space, with prospects for growth that remain relatively attractive.”
Following market checks, analysts at Deutsch bank remain bullish on FFIV with a Buy rating and $110 price target. The firm reports, “Our checks on F5 have been positive, in terms of project activity levels and on the potential for incremental upside to view based on rollouts of F5’s Web Application Security solutions. Incremental to our Outlook note is our latest checks suggesting a meaningful increase in virtualized server densities and in the rollouts of virtualized business applications; use cases that make F5’s ADC solutions a “need to have” versus a “convenience”, in large enterprise, Web portal, and Cloud provider rollouts. We see 2012 is likely to be an inflection point year for F5, with their Application Delivery solutions ramping in multiple virtualization, Cloud automation, and Microsoft (Nasdaq: MSFT), SAP (NYSE: SAP) and Oracle (Nasdaq: ORCL) use cases.”
The Wall Street consensus is $1.01 per share in earnings on $319.15 million in sales. During the first quarter of last year, the company reported earnings of $0.88 per share on $268.93 million in total sales. The company’s guidance calls for earnings of $0.99 to $1.01 on $315 to $320 million in sales for the quarter.
For the full year 2012, analysts on the Street are currently estimating $4.40 per share in earnings on $1.38 billion in total sales.
According to data from Bloomberg, shares of F5 Networks have 25 Buy ratings, 10 Hold ratings and no Sell ratings. The average price target on shares of FFIV is $119 with a range from $85 to $150.
Analyst Comments:
Wells Fargo is forecasting the company may post its first quarter results with upside or toward the high end of the company’s guidance. Following market checks, the firm notes the upside will be driven by technology and financial verticals. For the quarter, the firm estimates gross and operating margins of 83 percent and 37.9 percent, resulting in earnings of $1.01 per share. Wells Fargo maintains an Outperform rating and $112 to $122 price valuation range on the stock.
Wells Fargo anticipates management will offer conservative guidance which will fall inline with the Street’s estimates. “We believe F5 remains on track to deliver 20% growth in 2012 due to strong end market demand, the ramp of new products and the seasoning of sales hires over the past few years. We believe FQ1 results and guidance should bolster confidence in this growth objective, which remains above current consensus.”
Goldman Sachs first-quarter estimates of $1.01 per share in earnings on $320 billion in sales are relatively inline with the Street’s. The firm is also anticipates management will offer conservative second quarter guidance. An analyst at Goldman said, “We believe that F5 has a solid security product set that will lead to some share gains, but we do not believe it will be enough to push results meaningfully above 20% growth as security competitors such as Cisco and Juniper work on upgrading their product sets and others, such as Check Point and private Palo Alto Networks, continue to innovate.”
Goldman Sachs maintains a Neutral rating and $96 price target.
Wedbush recently reiterated an Outperform rating and $115 price target amid the company's leading position in the application delivery market, current demands trends, and potential traction with product refresh and new solutions. Although the firm is bullish on its long-term outlook for the company, for the first quarter Wedbush forecasts earnings of $1.01 per share on $319.3 million in sales.
An analyst at Wedbush said, “We continue to like the name for the long term due to F5’s strength in the core application delivery market, a new product refresh in 2012, and our optimism on the company’s push into new markets, including new security firewalls for the telco vertical. We advise investors to build positions in F5 as it remains the clear leader in the space, with prospects for growth that remain relatively attractive.”
Following market checks, analysts at Deutsch bank remain bullish on FFIV with a Buy rating and $110 price target. The firm reports, “Our checks on F5 have been positive, in terms of project activity levels and on the potential for incremental upside to view based on rollouts of F5’s Web Application Security solutions. Incremental to our Outlook note is our latest checks suggesting a meaningful increase in virtualized server densities and in the rollouts of virtualized business applications; use cases that make F5’s ADC solutions a “need to have” versus a “convenience”, in large enterprise, Web portal, and Cloud provider rollouts. We see 2012 is likely to be an inflection point year for F5, with their Application Delivery solutions ramping in multiple virtualization, Cloud automation, and Microsoft (Nasdaq: MSFT), SAP (NYSE: SAP) and Oracle (Nasdaq: ORCL) use cases.”
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